Thursday, July 30, 2009

URS Corporation is a large publicly-traded construction and engineering firm based in San Francisco. It is also one of the three outside firms who helped plan and design the extra 160 parking spots at Eltingville Transit Center.

According to a March 3 regulatory filing, URS expects 35% of its 2009 revenue to come from government spending. At that point, it had $10.2 billion worth of government contracts in its backlog.

URS expects 2009 revenues to be between $9.5 and $10.0 billion. Last year, revenues increased 87.4% to $10.1 billion from $5.4 billion in fiscal 2007.

At $50.55, URS stock is up 16% from a year ago while the S&P is still off by 23%.

Just Like WSP Group, URS Corporation was on a buying binge in 2007 and bought Washington Group International, an engineering firm with 25,000 employees that year.

The Sells-side of the deal is the American part. Charles Sells founded the design firm in 1925 and it was acquired by the London-based WSP Group in 2007.

In its 2008 annual letter, WSP Group Chairman David Turner noted, "WSP Sells, which is a leading bridge inspector and infrastructure specialist in the USA, is already seeing benefits from the US Governments' stimulus package."

Publicly-held WSP' revenues increased in 2008 by 36% to $1.2 billion from $920 million the year before. It has 10,000 employees.

Eight or nine New York Department of Transportation staffers and outside consultants worked on planning and designing Eltingville's additional 160 open-air asphalt parking spots, amounting to 3000 billable hours over a 16-month period, based on my Q&A with the NY Department of Transportation.

With the final bill coming to $400,000, the brains behind this project clocked an average $133 an hour during a recession. Nice work if you can get it. Since it's highly unlikely that the staffers on the project made that much, I wonder what the consultants charged.

I'm requesting details of payments made to outside firms from the New York Department of Transportation.

This may be all above the board, but the simple fact that adding 160 extra parking spots to a relatively new lot costs $400,000 in planning and $2.6 million to build still blows my mind.

"Bechtel's relationships with policymakers and officeholders dates back to the early part of the Twentieth century when Stephen D. Bechtel (shown) partnered with John A. McCone, who went on to become chief of the CIA under President John F. Kennedy and introduced the Bechtels to many influential figures.

In the 1970s, Bechtel hired a slew of government officials to help with its expanding international operations: former Secretary of Health, Education and Welfare Casper Weinberger (who would leave in 1980 to serve as Reagan's Defense Secretary); Atomic Energy Commission chief executive Robert Hollingsworth; former ambassador to Turkey and Saudi Arabia Parker T. Hart; and John G. Dillon, a retired rear admiral who directed the Pentagon's construction policy."

Among other shenanigans, "Bechtel is also the subject of a review ordered by Gov. Mitt Romney of Massachusetts over its handling of the nation's largest urban transit construction project in Boston. Known as the "Big Dig" for the giant, 10-lane tunnel it aims to install under city streets, the project, contracted to Bechtel and construction firm Parsons Brinkerhoff in 1985, is currently about $1.6 billion over budget."

Bechtel also caught a lot of heat for its lucrative role in cleaning up after Hurricane Katrina. See the Washington Post article about it.

Bechtel was one of 4 large firms with extensive government ties to win a $500 million no-bid contract from the Federal Emergency Management Agency. A year later, the Government Accountability Office would show that three of the companies had lost millions in taxpayer money due to poor planning. In all, the 4 firms secured $3 billion from September 2005 to March 2007.

(PBS) JEFFREY KAYE: After Katrina, FEMA awarded no-bid trailer contracts to four well-connected companies. FEMA gave the Mississippi contract to the Bechtel Corporation, one of the largest engineering, construction and project management companies in the world.

REP. GENE TAYLOR (D),R Mississippi: They did a crummy job, and they can't tell me otherwise because I'm from here.

JEFFREY KAYE: Democratic Congressman Gene Taylor is building a new house on the property in Bay St. Louis, Mississippi, where his old home, destroyed by Katrina, once stood. He's been a dogged critic of Bechtel.

REP. GENE TAYLOR: I know the people that were hurt by their lack of actions, and I know how much money they squandered that could have been done a heck of a lot cheaper, and they'll never convince me otherwise.

JEFFREY KAYE: Taylor says FEMA gave Bechtel a cost-plus contract, which pays for expenses and overruns and offers no motivation to minimize costs.

REP. GENE TAYLOR: The more money they spend, the more people they hire, the more needless layers of bureaucracy they put in there, they get paid a profit on top of every expenditure they run up.

Bechtel also played a controversial role rebuilding Iraq, leading to major federal investigations into whether the money it and other firms were awarded were properly spent.

In a 2003 article, CorpWatch alleged that Bechtel Corp and its owner had built a tangled web with the federal government, landing countless million and billion dollar contracts along the way. 'After the company's owner, Riley Bechtel, (son of Stephen) was appointed as the Bush Administration's adviser on how to create markets for American companies overseas, his firm's first contract in Iraq covered virtually all the major projects in the war-torn country including "seaports, two international and three domestic airports, potable water, electric power plants, roads, railroads, schools, hospitals and irrigation systems.'

At the time, CorpWatch's Pratap Chatterjee noted that some lawmakers were pushing for a bill that would force 'the government to explain publicly how contracts have been awarded under a limited bidding process.'

Ron Wyden, a Democratic Senator from Oregon, sponsored the bill."You look at this process, which is secret, limited or closed bidding, and you have to ask yourself: `Why are these companies being picked?' Wyden, told the New York Times.

In its last fiscal year, revenue climbed to $31.4 billion from $27 billion in 2007, while the value of new work booked rose to $35 billion from $34.1 billion, producing the firm's sixth straight year of record total sales and third consecutive year of record bookings.

Operations in North America were responsible for 40% of earnings and 2/3 of bookings. Government contracts are a key component of its book of business. I emailed Bechtel's Mike Kidder to see how much.

Also from Forbes:In its 110-year history, four generations of Bechtel family members have been engaged in projects in civil infrastructure, power, petrochemicals, telecommunications and government services. Notable jobs completed by Bechtel include the Channel Tunnel connecting England and France; Jubail Industrial City in Saudi Arabia; and Hong Kong International Airport.

*From Bechtel's website: "That makes Bechtel the largest telecommunications engineering and construction firm in the United States, with nearly seven times the revenue of its nearest competitor."

Wednesday, July 29, 2009

Many thanks to Adam Levine, public affairs officer at the NYDoT, for answering these questions about the $400,000 being spent to 'plan and design' the additional spots before taking off for vacation.

He actually pulled a 24-hour turn around which is pretty amazing considering I'm an unpaid citizen activist blogger.

1.) How many people were involved in planning and designing this lot and over what period of time? What would be the estimated number of hours spent to bill $400k?

Including NYSDOT and consulting engineering staff, 8-9 people worked on the project over a 16-month period, spending a total of about 3000 hours designing the expansion.

As with the cost estimate, I will be glad to share with you the fruits of their labor, in the form of the project plans, once the project has been awarded.

2) Were any outside design/planning firms hired? Who were they?The consulting firms that assisted us in preparing the design were a joint venture among Bechtel Corp., WSP Sells and URS Corporation. As they are working under the direction of the department, I ask that you direct your questions to me and I will get your answers. One person's muzzling is another person's taking responsibility and standing up for our actions and decisions.

3) What needs to be done to plan and design 160 open-air parking spots?As each site is unique, we can say that in this case, traffic and environmental issues needed to be analyzed and a design report needed to be prepared summarizing the project analysis. After these were completed, design of the park-and-ride details could be performed.

4) What were some of the obstacles to getting this project through? (You'd mentioned a bird reserve nearby)

I don't recall mentioning birds, but there are wetlands near the project, both existing and recently developed. We also wanted to make sure we stayed within an envelope that would not preclude other uses of nearby land along the Korean War Veterans Parkway, and we also had to make provisions for the temporary retention of storm water on the site, while the existing drainage system was being worked on as part of the expansion.

From the March Government Accountability Offices report on how federal stimulus bucks were being put to use and tracked:

New Funds, New Cabinet"New York’s Governor, in anticipation of the Recovery Act, established a Recovery Cabinet in February 2009...[to make] funding decisions in a “situation room” that works with the relevant state departments to disburse recovery funds in a manner that seeks to maximize the act’s objectives and address the political need to spread money throughout the state."

Tracking Systems, Not Much New"For the most part, New York plans to track and monitor Recovery Act funding using existing internal control, audit, and accounting systems. For example, [Office of the State Comptroller] plans to use its existing Central Accounting System to tag and track Recovery Act funds as they are disbursed."

Concerns, A Few"However, state officials have several oversight concerns, including monitoring Recovery Act funds that do not pass through state agencies and the ability of some local authorities that may not have experience managing federal programs to oversee large infusions of new funding. Finally, many officials throughout the state are concerned about their ability to consistently report on the impact of Recovery Act funding."

The Buck Stops...In Albany"According to OSC, it intends to closely scrutinize contracts and monitor payments charged to Recovery Act appropriations to ensure adequate accountability, compliance, and effective and efficient use of Recovery Act funds. In addition, OSC says it plans to post the Recovery Act data that will flow through the central accounting system to Open Book, the Web site that provides transparency for contracts, expenditures, and local government funds."

As of July 29, the Eltingville project was not listed on the site in anyway. I suppose this is all post award. (the hyperlink wasn't working) http://wwe1.osc.state.ny.us/transparency/arra/arraDataContracts.cfm?CFDA=20.205&a=17000

The existing five-year old Eltingville Park and Ride transit center, replete with 225 parking spaces, bus loading and storage areas, and transit center building with restrooms and inside all-weather waiting area cost taxpayers $5.4 million, just $2.6 million more than what tacking on an extra 160 open-air asphalt parking spots will cost.

This is information I've been wanting for awhile and I found in a PPT slide online from a presentation made in Miami by a group consisting of Robert Newhouser, Senior Director of NYC Transit Bus Service & Operations Planning, Paul Gawkowski, Director and Darnell Tyson, Principal Transportation Planner.

According to this 2008 presentation, 9 express bus routes and local buses frequent the Elingville station, serving 40,100 customers daily. At that point, the lot was reportedly already filled to capacity and there were already plans to expand to 375 cars (ten short of the 160 being added) by October 2009.

How adding some spots to such a new park and ride cost to much money? Why weren't there more spots put in in the first place?

When I visited the Eltingville Park and Ride, I was surprised to find that a significant portion of the parking lot was already wrapped with chain link, separating it from a construction site about two football fields large. There were tractors, trucks, large mobile offices, all signs of a project in motion - but no workers. The company doing the work was Beaver Concrete Construction, one of the 7 bidding firms. Also one that is currently ignoring my calls and emails.

I spoke with a few bus drivers hanging out at transit center and none of them knew what was going on it the lot. Or where the additional spots would go.What is going on is the existing Elingville construction site?

UPDATE from the NY DoT"The work you see at the site now is associated with a nearby project. While we are replacing a nearby pedestrian bridge, the contractor on that job has been using the site to keep his equipment and materials, what we call a staging area. He will vacate the area in time for the park-and-ride work to begin."

We're making headway with the bidders but I still can't understand why it costs the state of New York $400,000 to 'plan and design' 160 additional parking spots to a 5 year-old park and ride. And were any outside firms paid to pitch in?

I have been told by one of the bidding firms owners that it is typical for planning and designing to eat up about a tenth of a government project's budget, at least in New York.

I sent the following questions below to NY DOT's press officer on July 28, yesterday. They were essentially the same questions I'd asked weeks ago. I also asked to interview some of the project's planners and he said that would happen, but nothing so far.

Here are the questions we want answered taxpayers:

1.) How many people were involved in planning and designing this lot and over what period of time? What would be the estimated number of hours spent to bill $400k?

2) Were any outside design/planning firms hired? Who were they?

3) What needs to be done to plan and design 160 open-air parking spots?

4) What were some of the obstacles to getting this project through? (You'd mentioned a bird reserve nearby)

Tuesday, July 28, 2009

Michael Criscola, owner of the Crisdel Group, got back to us with some answers.

1) You had a mid-range bid at $3.04 million. Why is your bid lower or higher than others? Why would the government go with a higher bid?

Our number for this project was complete and in a better economy would more than likely have been competitive. Possibly it was higher than the low bidders to our overhead cost and the fact that we are an out of state contractor. The government would only go with a higher bid if the lower bid(s) were incomplete, that scenario is rare.2) How old is your firm?

40 years3) How many employees did you have on January 1, 2009? How many do you have now?

45 – 110. For our industry a better dates to compare would be July 08 vs July 09. We are a seasonal business, especially when asphalt is involved. January is most often are lowest payroll month, it’s a poor bench mark to use. [We had] 120 at our peak last year.4) How many employees will be working on this project? Will you hire any?

8-30 at any one time, including our subcontractors. Yes we would have had to hire some workers. 5) How much will be spent on paying your workers for this project?

$1,200,000. +/- including our subcontractors cost.6) How much will be spent on materials?

$1,300,000. +/- including our subcontractors cost.7) Do you do a lot of work for the government? How many projects in total?

Yes. This year 10+ projects.8) If you are awarded the project, when do you expect to begin and to finish?

Friday, July 24, 2009

After about 3 weeks of emails and phone calls, I finally got my eight questions answered by one of the bidding firms thanks to some help from the NY Department of Transportation's press department and the cooperation of the firm's owner.

Difazio Industries

1) You had the lowest bid at $2.3 million. Why is your bid lower than others? Why would the government go with a higher bid?

We are a Staten Island based company and utilized the hometown advantage when putting together our estimate for this project. Generally that results in a lower overall mark-up on the project.2) How old is your firm?

DiFazio Industries is 5 years old. However we bring over 30 years of heavy/ highway construction experience. Our parents original company was started in 1979 and we started DiFazio Industries in 2004 and began to implement a exit strategy so they can retire.3) How many employees did you have on January 1, 2009? How many do you have now?

As of January ’09 we had 72 employees, as of today we have 884) How many employees will be working on this project? Will you hire any?

Our estimate calls for total 8200 man hours and does not include additional man hours for our sub-contractors. Yes, this project most definitely will help us avoid any layoffs for the balance of the year.5) How much will be spent on paying your workers for this project?

We have estimated almost 800k of payroll expenses not including sub contractors.

6) How much will be spent on materials?

Permanent materials and construction materials are estimated at 750k7) Do you do a lot of work for the government? How many projects in total?

Approx. 50% of our work is for government agencies. On average we have approx. 3-6 both public and private projects going on at any one time.

8) If you are awarded the project, when do you expect to begin and to finish?

If awarded we will start 10 days after award and pending winter weather it has a completion date of 4/2010

Tuesday, July 21, 2009

I received a friendly phone call this morning from John Difazio, still the only bidder of seven to reply to any of my calls or emails. He told me that he'd like to answer my questions but that another fellow at DoT (who will go unnamed unless he proves important to my reporting) told him all press releases must go through the NY dept of transportation during the preaward period. "I don't want to speak out of turn," he said.

This may very well be true. I'm still verifying. But I'm 2 weeks into reporting and I still don't have any of my basic questions answered from any of the seven firms. I'm going to see if DoT can help me by emailing the questions to the companies. These firms don't have the same PR systems as GE. If someone asks them a few questions and they don't feel like answering, they don't. With the job set to be awarded in 3 weeks, I don't have much time, but we'll see what I can come up with.

Monday, July 20, 2009

Shots of the Eltingville Lot on Wednesday July 15 at 8am. The existing 225 spots were not quite at max capacity. Commuters I spoke with said that this was because fewer people take the buses during summer but that during fall and winter the lot gets packed.

In order to learn more about the bidding firms, I'd asked one firm owner, John Difazio, a few basic questions, about his company. For instance, how many employees do you have. In a July 16 blackberry communique, he wrote that he couldn't speak until after the "preaward process and can get clearance from the NYDOT press agent."

As far a Difazio claiming that he couldn't speak without clearance post-award goes, the DoT's Levine said in July 16 email that the agency hadn't barred him from talking to the media. "No one has told him he can't speak," wrote Levine. "If anyone would have done that, it would have been me, and I didn't. I have to think that he has nothing to gain by speaking to the press. I don't think we've worked with him before, and he may not want to say something that gets our upcoming partnership off on the wrong foot."

It's true that he has nothing to gain by speaking to the press, but this makes factfinding quite difficult for your reporter. None of the other firms I've surveyed have even responded. As a private citizen asking questions about private companies, I'm not making much headway. But different government agencies and trade groups are helping.

I spoke with the trade association's PR person, Felice Farber, and she was very helpful. She said five of the seven firms, Difazio Industries, Grace Industries, Lomma Constuction, Crisdel Industries and Beaver Concrete are all member companies and have been around awhile but couldn't provide specifics in terms of how old they each are or how many employees they have. She said she'd ask around about Shamrock and Paul Scariano.

Farber was familiar with the Eltingville project and said the extra parking was needed. But she also admitted that the project wasn't necessarily the highest priority or "best use of money" in terms of infrastructure projects. "In New York City, we're so desperate for transportation dollars that those stimulus [funds] went to shovel-ready projects. If you want to spend a huge amount of infrastructure money fast, it's going to be bridge painting and 'mill and fill,' or paving roads."

Thursday, July 16, 2009

In order to figure out what taxpayers will be getting for their money from each bidding firm, I decided survey each of the seven firms. Here's what I sent John Difazio, proprietor of Difazio Industries on July 7, one week ago.

Hello Mr.Difazio,

I'm covering the Eltingville Transit Center park-and-ride stimulus project as a private citizen and am asking all the competing firms to answer a series of questions. Thank you in advance for your cooperation! If you would like to attach an image of yourself for the company profile that would be great.

Thanks!

1) You had the lowest bid at $2.3 million. Why is your bid lower than others? Why would the government go with a higher bid?2) How old is your firm?3) How many employees did you have on January 1, 2009? How many do you have now?4) How many employees will be working on this project? Will you hire any?5) How much will be spent on paying your workers for this project?6) How much will be spent on materials?7) Do you do a lot of work for the government? How many projects in total?8) If you are awarded the project, when do you expect to begin and to finish?

So I check in 2 days ago:

Hello John,Can I expect answers by tomorrow afternoon?Thank you for your cooperation.

To which he replied today, today, July 16

Unfortunately I am not able to respond to your questions until we are through the pre award process and can get clearance from the NYSDOT press agent. Sorry.

That's what I said. Seems a little high. Also figured I'd like to know if any outside firms were contracted to do this brainwork. How many man hours were clocked on this project. Where'd the money go?

So, I emailed my old pal, Adam Levine, the press guy at the New York Department of Transportation.

July 15

Hello Adam,NY DoT is providing $400,000 to plan and design the 160 parking spots. I'm writing an article about what that $400,000 involves. When did the planning begin? How many people are involved? Any outside firms?Thanks!

To which he responded 3 minutes later:

Hi,

I'm running around a bit today. I wonder if I can get back to you with some more info over the next couple of days. If not, I'll dig up what I can.

And just for clarification, when you say NY DoT, do you mean New York City DOT or New York State DOT?

Thanks, and have a great afternoon.

- Adam

So, it's been 2 days. I was crushed at work and didn't get back to Levine until today to reply that he he'd written in a July 2 email that the state would be covering the remaining $400,000. Haven't heard back yet. Hopefully tomorrow.

Monday, July 6, 2009

Assemblyman Lou Tobacco said: “I would like to thank Governor Paterson for securing nearly $5 million in federal funding for Staten Island’s transportation system. This funding will go along way to update, improve and increase the borough’s transportation options while enhancing the aesthetics of Staten Island’s transportation hubs.”

Senator Diane Savino said: “Staten Island families and businesses will be better off thanks to these improvements to our transportation facilities. Expanding the park-and-ride facilities at the Eltingville Transit Center and Hugenot Ave. will allow commuters to have better access to our public transit system, easing congestion and reducing emissions.”

Senator Andrew Lanza said: “For years, the Eltingville Transit Center Park and Ride has seen increased usage and the Governor's announcement to expand the facility is welcome news to all residents of Staten Island. Staten Island's premiere park and ride facility, this expansion will go a long way in easing the commute for hundreds of Staten Islander's and make it easier and more convenient to take an express bus to Manhattan.

Congressman Michael E. McMahon said: “The 4.8 million in stimulus funds, which will be used to expand the park-and-ride facilities in Huguenot and Eltingville, will greatly improve the commute of hundreds of workers on Staten Island. Our commute, especially for our neighbors on the South Shore, is one of the most arduous in the country. With the expansion of the park-and-rides, we will be able to ease some of that burden. I commend Gov. Paterson for recognizing the need to better the commute of Staten Islanders.”

Thursday, July 2, 2009

"I made it from Midtown to Eltingville, the end of the x1 line, in record time: 1 hour, 43 minutes — a full 10 minutes faster than the time printed on the bus’s schedule. “I’m so disappointed,” said Mike Newell, my seatmate, as we sailed across the bridge. “You didn’t get to see the real commute.”

In July 2008, when New York State DoT was paying for the expansion of the lot, it was a $2.8 million project. This was at the height of costs in terms of materials (remember gas was $150 a barrell?), and now we're in a recession - construction projects are scarce (cheap labor) and commodities are cheap. Why is this a $3 million project a year later?

Here's the details on the project provided by the state on its website. In this page, it says that the state would chip in but in a July 2 email, the spokesperson explained that the $2.6M is all from the federal piggy bank and the "remaining funding was provided by New York State for design of the expanded facility."

Fine Print from the website

Project Status

The current status of the project is In Development.

Project Development began in Fall 2007.

The Bid Opening is expected to be in Summer 2009.

Construction is expected to begin in Summer 2009.

Construction is expected to be completed in Spring 2010.

Cost of the Project

The project cost is approximately $2,600,000.

This project receives funding from the following sources:Federal: YesState : YesLocal : No

I've spoken with our funding person, and he advises that the construction of the project will be funded entirely through ARRA. The $2.6M noted in the press release and on the website (recovery.ny.gov) includes direct construction costs and construction inspection. The remaining funding was provided by New York State for design of the expanded facility.

I hope this is helpful. Please let me know if there's anything more you need.

Have a great holiday weekend.

- Adam

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Adam S. Levine, P.E., AICPDirector, Public AffairsNYSDOT Region 11 - New York City

The Purpose of this Blog

To document the progress of a smallish taxpayer-funded stimulus project.

This one involves $2.6 million in funding from the American Recovery and Reinvestment Act for a $3 million project (including state dollars for design and planning) to beef up the existing Eltingville Transit Center park-and-ride in Staten Island by adding 160 new parking spots to the existing 225 spaces.

Some $32 million in ARRA dollars have been tucked aside for transportation projects in New York City so the Eltingville dig is absorbing about a tenth of the Big Apple's 'shovel ready' stim funds. The lot was originally built in 2004.

This oversight blog was launched July 2. The Department of Transportation expects to announce which bidding firm will complete the project by mid-August. That leaves a narrow 6-week window to determine whether, at $18,750 apiece, these babies are worth it before ground is broken.

Questions That Need Answering

1. Why did it cost the New York Department of Transportation $400,000 to "plan and design" 160 parking spots?

2. Why does the NYDOT estimate that it will cost $2.6 million in stimulus bucks to "build" 160 asphalt open air parking spots?

3. How much did it cost to build the Park and Ride in 2004 and why didn't they build more spots?

Partial Answer: The original lot cost $5.4M

4. Will the extra 160 parking spots be sufficient for a growing population?

5. Why didn't they build more parking spots in the first place?

6. What is Beaver Concrete doing next door to the Eltingville Park and Ride?